WASHINGTON -- The House on Monday defeated a $700 billion plan to buy bad debt from Wall Street, despite the support of all but one lawmaker from South Carolina.
"We cannot allow the American taxpayers to become the insurance policy for financial decisions that did not turn out as planned," said Rep. Gresham Barrett, a Republican, on his voted against the plan.
But South Carolina's three other Republican House members -- Reps. Henry Brown, Joe Wilson and Bob Inglis -- did back the measure. And so did both of South Carolina's Democrats in the House, Reps. James Clyburn and John Spratt.
As the Democratic whip, Clyburn played the lead role in trying to get the rank and file of his party to line up behind the bill. Clyburn blamed Republicans for the failure of the package, despite the 95 Democrats who also opposed the measure.
The bill, which emerged from more than a week of delicate negotiations between the House, the Senate and the Bush administration, was defeated 228-205, leaving the fate of the plan in question.
Stocks fell sharply on Wall Street during the vote, which was held open for an unusually long time while Clyburn, the third ranking Democrat, and other congressional leaders worked unsuccessfully to convince members to change their minds.
Opposition to the bill came from both ends of the political spectrum.
Conservatives objected to the use of billions in taxpayer funds to buy bad debt linked to mortgages securities, while many liberals were troubled by the lack of substantial changes to the way Washington regulates Wall Street.
In all, 140 Democrats voted for the bill. Of Republicans, Of Republicans, 65 voted for it and 133 voted against it, with one not voting.
"Sixty percent of them (Democrats) put aside all of their individual feelings, emotions experiences and voted for it - this bill," Clyburn said. "Sixty-seven percent of the Republican conference decided to put political ideology ahead of the best interest of our great nation," he said.
Democratic leaders held the vote open an extra 37 minutes to lobby lawmakers to switch their "no" votes, pointing to the rapid drop in the market in an effort to change minds.
The Dow fell almost 800 points Monday - a one-day record drop.
Before the vote, Spratt, chair of the House Budget Committee, lobbied fellow lawmakers on the House floor to support the plan. He said congressional leaders had vastly improved the proposal put forth by the administration last week by adding layers of oversight.
Spratt cited a warning from Federal Reserve Chairman Ben Bernanke, who grew up in South Carolina, that failure to fix problems in the credit market could reverberate through the economy.
"When he warns the situation is dire, the cost of doing nothing could be catastrophic. We have to listen. Indeed, we ignore this crisis at our peril," Spratt said
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